Notice2025-17446
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade Units of the Sprott Physical Copper Trust
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 174 (Thursday, September 11, 2025)</title>
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[Federal Register Volume 90, Number 174 (Thursday, September 11, 2025)]
[Notices]
[Pages 44117-44120]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-17446]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103904; File No. SR-NYSEARCA-2025-24]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change To List and Trade Units of the Sprott Physical Copper Trust
September 8, 2025.
On June 10, 2025, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
list and trade units (``Units'') of the Sprott Physical Copper Trust
(``Trust'') under NYSE Arca Rule 8.201-E (Commodity-Based Trust
Shares). The proposed rule change was published for
[[Page 44118]]
comment in the Federal Register on June 26, 2025.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 103296 (June 23,
2025), 90 FR 27362 (``Notice''). Comments on the proposed rule
change are available at: <a href="https://www.sec.gov/comments/sr-nysearca-2025-24/srnysearca202524.htm">https://www.sec.gov/comments/sr-nysearca-2025-24/srnysearca202524.htm</a>.
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On August 5, 2025, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ The Commission is publishing this order to solicit comments
on the proposed rule change from interested persons and to institute
proceedings pursuant to Section 19(b)(2)(B) of the Act \6\ to determine
whether to approve or disapprove the proposed rule change.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 103634, 90 FR 38528
(Aug. 8, 2025). The Commission designated September 24, 2025 as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ 15 U.S.C. 78s(b)(2)(B).
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I. Summary of the Exchange's Proposal
As described in more detail in the Notice,\7\ the Exchange proposes
to list and trade Units \8\ of the Trust under NYSE Arca Rule 8.201-
E,\9\ which governs the listing and trading of Commodity-Based Trust
Shares on the Exchange.\10\ Sprott Asset Management LP (``Manager'') is
the manager of the Trust.\11\ WMC Energy B.V. (``WMC'') serves as
technical advisor to the Manager and advises and assists with respect
to the holding, buying, and selling of physical copper.\12\ RBC
Investor Services Trust (``RBC'') is the trustee and valuation agent of
the Trust (``Trustee'' or ``Valuation Agent,'' as the case may be) \13\
and the custodian of the Trust's assets, including cash, if any.\14\
TSX Trust Company is the transfer agent and registrar of the Trust.
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\7\ Additional information regarding the Trust, Units, Copper
industry, supply and demand, and markets, redemption and termination
events, net asset value, intraday indicative value, availability of
information pertaining to Copper, trading rules and halts,
surveillance, and information bulletin, among other things, can be
found in the Notice and Registration Statement (as defined herein).
See Notice, supra note 3 and accompanying text; infra note 9.
\8\ According to the Exchange, Units of the Trust currently
trade on the Toronto Stock Exchange under the symbol ``COP.U'' in
U.S. dollars and ``COP.UN'' in Canadian dollars. The Exchange
represents that the Units satisfy the requirements of NYSE Arca Rule
8.201-E and thereby qualify for listing on the Exchange.
\9\ The Trust will file with the Commission a registration
statement on Form 40-F to register the Units (``Registration
Statement'') under Section 12 of the Securities Exchange Act of
1934, and will file with the Commission as part of such Registration
Statement all information material to an investment decision that
the Trust, since the beginning of its last full fiscal year: (i)
made or was required to make public pursuant to the law of any
Canadian jurisdiction, (ii) filed or was required to file with a
stock exchange on which its securities are traded and which was made
public by such exchange, or (iii) distributed or was required to
distribute to its securityholders. The Registration Statement is not
yet effective, and the Units will not trade on the Exchange until
such time that the Registration Statement is effective.
\10\ The term ``Commodity-Based Trust Shares'' means a security
(a) that is issued by a trust that holds a specified commodity
deposited with the trust; (b) that is issued by such trust in a
specified aggregate minimum number in return for a deposit of a
quantity of the underlying commodity; and (c) that, when aggregated
in the same specified minimum number, may be redeemed at a holder's
request by such trust which will deliver to the redeeming holder the
quantity of the underlying commodity. See NYSE Arca Rule 8.201-
E(c)(1).
\11\ The Manager is a limited partnership formed and organized
under the laws of the Province of Ontario, Canada, and acts as
manager of the Trust pursuant to the Trust Agreement (as defined
herein) and the management agreement. The Manager is responsible for
the day-to-day activities and administration of the Trust. The
Manager manages and directs the business and affairs of the Trust.
Additional details regarding the Manager are set forth in the
Registration Statement. The Manager has adopted a policy pursuant to
which any entity or account that is: (a) managed; or (b) for whom
investment decisions are made, directly or indirectly, by a person
that is involved in the decision-making process of, or has non-
public information about, follow-on offerings of the Trust is
prohibited from investing in the Trust, and no such decision-making
person is permitted to invest in the Trust for that decision-making
person's benefit, directly or indirectly. The Manager has a
fiduciary responsibility under applicable Canadian law to act in the
best interest of the Trust.
\12\ WMC is an independent physical commodity merchant and
industrial asset development company established to provide physical
supply chain solutions to the nuclear and energy transition metals
industries, and sources, stores, finances and delivers physical
commodities worldwide.
\13\ RBC is a trust company existing under the laws of Canada.
RBC is affiliated with a broker-dealer. RBC has represented to the
Exchange that it has put in place and will maintain the appropriate
information barriers and controls between itself and the broker-
dealer affiliate so that the broker-dealer affiliate will not have
access to information concerning the composition and/or changes to
the Trust's holdings that are not available on the Trust's website.
The Trustee holds title to the Trust's assets on behalf of the
unitholders of the Trust (``Unitholders'') and has exclusive
authority over the assets and affairs of the Trust but has delegated
the day-to-day activities and administration of the affairs of the
Trust to the Manager. The Trustee has a fiduciary responsibility to
act in the best interest of the Unitholders. Additional details
regarding the Trustee are set forth in the Registration Statement.
\14\ According to the Exchange, the Trustee is responsible for
the safekeeping of all the assets of the Trust delivered to it and
acts as the custodian of such assets. The Trustee is not responsible
for the safekeeping of the Trust's physical copper. The Manager,
with the consent of the Trustee, has the authority to change the
custodial arrangement, including, but not limited to, the
appointment of a replacement custodian and/or additional custodians.
Additional details regarding the Trustee and the custodial
arrangements of the Trust are set forth in the Registration
Statement.
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Description of the Trust
The investment objective of the Trust \15\ is to invest and hold
substantially all of its assets in physical copper metal in either
Grade 1 Cathode \16\ form or Grade A Cathode \17\ form that is fully
allocated or stored at a Facility (``Copper'') and cash. The Trust
intends to achieve its objective by investing primarily in long-term
holdings of unencumbered Copper and will not speculate with regard to
short-term changes in Copper prices. The Trust will not hold any assets
other than Copper and cash and does not anticipate making regular cash
distributions to Unitholders. In addition, the Trust will not invest in
futures, options, warrants, options on futures, swap contracts, or
warehouse receipts. According to the Exchange, the Trust will not hold
or trade in commodity futures contracts, ``commodity interests,'' or
any other instruments regulated by the Commodity Exchange Act.
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\15\ According to the Exchange, the Trust was established as of
April 12, 2024 under the laws of the Province of Ontario, Canada,
and its provisions and features are set out in an amended and
restated trust agreement dated as of May 10, 2024 (``Trust
Agreement''). The Trust has obtained exemptive relief from the
Canadian securities regulatory authorities for relief from certain
requirements of National Instrument 81-102--Investment Funds,
legislation which governs mutual funds and non-redeemable investment
funds in each of the provinces and territories of Canada
(``Exemptive Relief''), to permit the Trust to, among other things,
appoint the Facilities (as defined in the Registration Statement) as
custodians of the Trust's Copper. Pursuant to the Exemptive Relief
granted to the Trust, the Trust is not subject to certain of the
policies and regulations of the Canadian Securities Administrators
that apply to other non-redeemable investment funds.
\16\ The term ``Grade 1 Cathode'' means a physical copper metal
cathode that, at the time of purchase by the Trust, satisfies the
CME standards for classification as a Grade 1 electrolytic copper
cathode.
\17\ The term ``Grade A Cathode'' means a physical copper metal
cathode that, at the time of purchase by the Trust, satisfies the
LME standards for classification as Grade A copper.
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The Trust will issue Units, each of which represents an equal,
fractional undivided ownership interest in the net assets of the Trust
attributable to the particular class of Units. Except with respect to
cash held by the Trust to pay expenses and anticipated redemptions, the
Trust expects to own only Copper. The investment objective of the Trust
is for the Units to reflect the performance of the price of Copper,
less the expenses of the Trust's operations.
According to the Exchange, the Trust will store its Copper with
Warehouse Providers (as defined in the Registration Statement) at
Facilities that are reputable and exclusively in warehouses that are
approved by the Chicago Mercantile Exchange (``CME'')
[[Page 44119]]
or the London Metal Exchange (``LME''), which is the main global market
standard for physical metal warehousing services that is accepted by
market participants and financiers. The Trust will only store Copper
with such Facilities at locations in Belgium, Canada, Germany, Italy,
Malaysia, the Netherlands, Singapore, South Korea, Spain, Sweden, the
United Arab Emirates and the United States. In addition, the Manager
will maintain market standard insurance for the physical Copper stored
with Warehouse Providers. Finally, the Facilities to be used by the
Trust are owned or contracted by the Warehouse Providers, which are
well-regarded multi-national providers of global storage for physical
metals.
Description of the Units
According to the Exchange, the Trust is authorized to issue an
unlimited number of Units in one or more classes and series of a class.
Currently, the Trust has issued only one class or series of Units.\18\
All Units of the same class or series of a class will have equal rights
and privileges with respect to all matters, including voting, receipt
of distributions from the Trust, liquidation and other events in
connection with the Trust. Units and fractions thereof are issued only
as fully paid and non-assessable. Units will have no preference,
conversion, exchange, or pre-emptive rights. In addition, subject to
limitations and requirements determined from time to time by the
Manager, each unit of a particular class or series of a class of the
Trust may be redesignated by the Manager as a unit of another class or
series of the Trust.
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\18\ According to the Trust's website, as of March 11, 2025, the
total net asset value (``NAV'') of the Trust and the NAV per unit of
the Trust were US$99.2 and US$8.99, respectively, and there were a
total of 11,034,857 Units issued and outstanding.
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As noted above, each Unit represents an equal, fractional,
undivided ownership interest in the net assets of the Trust
attributable to the particular class of Units. The Trust may issue
additional Units (i) in future offerings if the gross proceeds received
by the Trust per Unit are not less than 100% of the most recently
calculated NAV; (ii) by way of distribution in Units in connection with
an income distribution; or (iii) with the approval of Unitholders by
extraordinary resolution.
Net Asset Value
The NAV for each class of Units will be calculated by the Valuation
Agent as of 4:00 p.m. Eastern time, on each Business Day. The Trust
will report a daily NAV, based on the value of the Copper assets held
by the Trust. According to the Registration Statement, the fair market
value of the Copper held by the Trust will be based on reported spot
prices from Fastmarkets, a globally recognized price reporter.\19\
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\19\ According to the Exchange, the Trust is a mutual fund under
applicable Canadian securities legislation and must calculate its
NAV pursuant to Part 14 of National Instrument 81-106--Investment
Fund Continuous Disclosure (``NI 81-106''), a rule applicable to
Canadian mutual funds and administered by Canadian securities
regulatory authorities. Pursuant to Subsection 14.2(1) of NI 81-106,
the Trust must subtract the ``fair value'' of its liabilities from
the fair value of its assets when calculating its NAV. Subsection
14.2(1.2) of NI 81-106 defines fair value as (a) the market value
based on reported prices and quotations in an active market; or (b)
if the market value is not available, or the Manager believes that
it is unreliable, a value that is fair and reasonable in all the
relevant circumstances, and requires the Manager to establish and
maintain appropriate written policies and procedures for determining
fair value of the Trust's assets and liabilities and to consistently
follow those policies and procedures.
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The NAV as of the valuation time on each Business Day will be the
amount obtained by deducting from the aggregate fair market value of
the assets of the Trust as of such date an amount equal to the value of
the liabilities of the Trust (excluding all liabilities represented by
outstanding Units, if any) as of such date. The Valuation Agent
calculates the NAV per Unit by dividing the value of the net assets of
the class of the Trust represented by the Units on such day by the
total number of Units of that class then outstanding on such day.
Prior to commencement of trading in the Units, the Exchange will
obtain a representation from the Trust that the NAV per Unit will be
calculated daily and will be made available to all market participants
at the same time.
II. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEARCA-2025-24 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \20\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposal. Institution of proceedings does not
indicate that the Commission has reached any conclusions with respect
to any of the issues involved. Rather, as described below, the
Commission seeks and encourages interested persons to provide comments
on the proposed rule change.
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\20\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\21\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposal's consistency with Section 6(b)(5) of the Act,
which requires, among other things, that the rules of a national
securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \22\
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\21\ Id.
\22\ 15 U.S.C. 78f(b)(5).
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice,\23\ in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal is consistent with Section
6(b)(5) of the Act,\24\ and specifically, whether the proposed rule
change is designed to prevent fraudulent and manipulative acts and
practices.
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\23\ See Notice, supra note 3.
\24\ 15 U.S.C. 78f(b)(5).
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III. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is consistent with Section 6(b)(5) or any other provision of the Act,
and the rules and regulations thereunder. Although there do not appear
to be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\25\
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\25\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be
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approved or disapproved by October 2, 2025. Any person who wishes to
file a rebuttal to any other person's submission must file that
rebuttal by October 16, 2025.
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2153544d440c424e4c4c444f5552615244420f464e57"><span class="__cf_email__" data-cfemail="384a4d545d155b5755555d564c4b784b5d5b165f574e">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-24 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEARCA-2025-24. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSEARCA-2025-24 and should be submitted
on or before October 2, 2025. Rebuttal comments should be submitted by
October 16, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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\26\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-17446 Filed 9-10-25; 8:45 am]
BILLING CODE 8011-01-P
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